Until recently, there did not seem to be a clear answer in England to the question Whether the courts would enforce a contractual term whereby parties agree to refer a dispute to a non-binding alternative dispute resolution (“ADR”) process. The cases in this area ranged from suggestions that agreements to negotiate were unenforceable either because of uncertainty or on policy grounds1 to dicta that effect should be given to ADR clauses in the same way as jurisdiction clauses.2 In between this range, recent English cases have opined that effect will be given to an ADR clause if the process in question was a “binding” form of ADR.3 This position was unsatisfactory because it in part displayed an incomplete understanding of the entire range of ADR processes as well going against the increasing trend in many world jurisdictions to promote ADR as an appropriate form of dispute resolution. Now, a recent decision of the English High Court has extended enforcement to non-binding ADR processes such as mediation. This Comment seeks to examine the reasoning in that case and to assess its significance and limitations.

Cable & Wireless Plc v. IBM United Kingdom Ltd 4 involved a Global Framework Agreement (“GFA”) made between the parties. Schedule 10 provided for a benchmarking process by which the services and charges of IBM were compared with services and charges existing in the market. This benchmarking was to be conducted by a qualified independent third party selected from an agreed list of benchmarkers. Should the benchmarking process reveal that IBM was not meeting the objective specified in the schedule, IBM was to develop a Benchmark Plan within a specified time frame to address these deviations. Breach of these provisions provided Cable & Wireless (“C. & W.”) with various remedies, including termination and compensation. Pursuant to the GFA, Compass Management Consulting were engaged by the parties to carry out a benchmarking process. The report produced indicated that IBM was not meeting the stated objective. IBM disagreed with the report’s validity and declined to produce a Benchmark Plan until this dispute had been resolved. C. & W. claimed compensation pursuant to the agreement.

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